There is much talk in craft beer of the ever growing concern of consolidation – the very big buying of the very small. The fear is that it threatens the diversity of the craft beer industry. The more then 3,700 craft breweries in America and the 2,000 planned breweries are the backbone of the industry’s success. What is often missed is that there is a two pronged approach to controlling an industry and, arguably, a much more powerful one. You can control the production (breweries), but you can also control the distribution of a product. If you make it, but it can’t go anywhere, what good is it? That was exactly the concern we laid out in our article “Craft Beer’s Silent Crisis: Who Controls What You Drink?”

AB InBev is the world’s largest beer producer and the second largest beer distributor in the US, behind the Reyes Beverage Group. AB InBev just bought two prominent beer distributors – Standard Sales Company and American Eagle Distribution – in craft beer mecca Colorado and it has the beer industry worried. American Eagle Distribution oversees about 20 non-AB brands including Odell, Epic, Great Divide and Breckenridge brewing companies. Head of the Coloradoan Craft Beer Association says

“Historically, in their branches, they only distribute the Anheuser-Busch family of products,” Findley said of A-B-owned distributors.

“It remains to be seen how this is going to shake out (for craft brewers),” he added.

The end of Prohibition in 1933 led to the development of the what is called a three-tiered system in the US: producers, distributors and retailers. The law of the land, except for Washington State, is that there has to be distinct ownership of the three levels, to keep monopolies from occurring. But a loophole exists that allows brewers to distribute with a wholesale license. AB InBev was recently forced to give up distribution rights in neighboring Kentucky when they closed that loophole.

“House Bill 168, which was sought by the Kentucky Department of Alcoholic Beverage Control, is meant to close a loophole in a three-tiered system that aims to avoid monopolies by separating beer producers, distributors and retailers. The law’s passing means Anheuser-Busch must render its distributorships before its license expires,” The Courier-Journal reported.

Preserving the continued success of craft beer should be the goal of all craft beer lovers. Maybe craft breweries will just find other avenues of distribution, but as the choices dwindle where will they turn? If consolidation does continue, what will it look like in the future?